How does modern financial management differ from traditional financial management? - Brainly.in (2024)

1. Meaning:

Modern approach to financial statement analysis includes Cash Flow Statement, Funds Flow Statement, Ratio Analysis, Budgetary Control etc.

2. Method of Preparation:

Preparation of these statements are not so simple.

3. Reliability:

These statement are quite informative.

4. Reliability:

These statements are proved to be quite reliable and dependable for the purpose of analysis of financial statements.

5. Information:

These statements, no doubt, exhibit the required material information for the purpose of analysis of financial statements.

6. Presentation:

Presentation of these statements is quite new and more informative than the Traditional Approach.

7. Specificity:

Modern approach to financial statement analysis is quite possible to understand any specific information from these statements, say, the liquidity position.

8. Use:

These statements are usually pre­pared by the big business houses.

9. Area of Application:

Under Modern approach to financial statement analysis, in addition to the benefits that are available under traditional approach, the other material information viz. liquidity position, solvency position, profi­tability and management efficiency position can easily be understood accurately.

10. Preparation and Presentation:

Preparation and presentation of these statements are not so simple and the preparation of these statements are not mandatory for all firms.